What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-04-26 compared with 2023-04-17 · 502 added, 374 removed, 530 unchanged (62% of the section changed)

Financial Statements and Supplementary Data.

Report of Independent Registered Public Accounting Firm (PCAOB ID 2738 )

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2022

Consolidated Statements of Stockholders’ Deficit for the years ended

December 31, 2022 and 2021;

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

Connsolidated Statements of Changes in Stockholders’ Equity (Deficit)

for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for years ended December 31, 2023 and 2022

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Stockholders of Edgemode, Inc.

Opinion on the Financial Statements

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

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(the Company) as of December 31, 2023 and 2022, and the related consolidated statements of operations,

changes in stockholders’ deficit, and cash flows for the year ended and the related notes to the consolidated financial statements.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2022, and the results of its operations and its cash flows for the year ended in conformity with accounting principles

generally accepted in the United States of America.

changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023,

and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022,

and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023 in conformity

with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in the notes to the consolidated financial

statements, the Company began operations in 2020, has incurred net losses from operations since inception, and has an accumulated deficiency,

which raises substantial doubt about its ability to continue as a going concern.

Management’s plans regarding those matters are

discussed in Note 3.

have been prepared assuming the Company will continue as a going concern.

As discussed in Note 3 to the consolidated financial statements,

the company has incurred recurring losses from operations and had not yet achieved profitable operations as of December 31, 2023 which

raises substantial doubt about its ability to continue as a going concern.

Management’s plans regarding these matters are also described

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our

opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate

opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

As discussed in the notes to the consolidated

financial statements, the Company provides computing power in cryptocurrency transaction validation services to certain mining pool operators.

The transaction consideration received by the Company, if any, is a non-cash consideration, which the Company measures at fair value on

the date received.

The principal consideration for our determination

that performing procedures related to revenue recognition is a critical audit matter is due to the complexities involved in auditing the

completeness and occurrence of the revenue recognized by the Company.

To form our overall opinion on the consolidated

financial statements, we performed substantive analytical procedures to determine the existence, occurrence, and valuation of the digital

assets awarded to the Company as consideration for their services rendered to the pool operators.

Additionally, auditing management’s

evaluation of the accounting for mining revenues recognized involved significant judgement and subjectivity due to lack of formal GAAP

guidance in the United States.

(1) relate to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Derivatives Arising from Convertible Notes

The valuation of derivative liabilities arising

from convertible notes payable represents a significant aspect of the audit due to its materiality and the complexity involved in its

These liabilities are recognized based on the fair value of embedded conversion features associated with convertible notes.

The determination of fair value necessitates intricate valuation models, incorporating various assumptions, which are inherently subjective

and involve substantial management judgment.

To form our overall opinion on the financial

statements, our audit procedures included assessing the reasonableness of key inputs used in the company’s valuation models, evaluating

the appropriateness of management's valuation methodologies and assumptions, and assessing the impact of changes in these inputs on the

fair value measurement.

We also performed sensitivity analyses to inspect the potential effects of variations in key assumptions on the

reported fair value of the derivative liabilities.

Given the significance of these liabilities

to the financial statements and the complexity inherent in their valuation, our audit required significant auditor judgment and involved

challenging evaluations of subjective inputs.

/s/ M&K CPAS, PLLC

PCAOB ID 2738

We have served as the Company’s auditor since 2021.

The Woodlands, TX

April 26, 2024

Edgemode, Inc.

(Formerly Fourth Wave Energy,

Consolidated Balance Sheets

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Current assets:

Subscription receivable

Prepaid expenses and other current assets

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Intangible assets - cryptocurrencies

Equipment, net

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

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Notes payable

Notes payable – related parties

Convertible notes payable

Derivative liabilities

Series B preferred shares liability, net

Total current liabilities

Equipment notes payable, net of current

Total liabilities

Commitments and contingencies

Preferred shares of EdgeMode

Stockholders' equity (deficit):

Stockholders' deficit:

Preferred shares, $ 0.001

par value, 4,999,000

shares authorized December 31, 2022 and 2021;

shares authorized;

zero 0 issued and outstanding December 31, 2023 and 2022

Common shares, 950,000,000 and 500,000,000 shares authorized, December 31, 2022 and December 31, 2021;

Par value $ 0.001 ;

Common shares, $ 0.001 par value, 950,000,000 shares authorized;

390,687,459 and 390,437,459 shares issued and outstanding, December 31, 2023 and 2022, respectively

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( 35,880,128 )

Stockholders' equity (deficit)

Stockholders' deficit

( 3,132,956 )

Total liabilities and stockholders' equity (deficit)

( 1,593,672 )

Total liabilities and stockholders' deficit

The accompanying notes are an integral part of

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Edgemode, Inc.

(Formerly Fourth Wave Energy,

Statements of Operations

Consolidated Statements of Operations

For the Year Ended

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( 31,389,704 )

Other expense:

Other income (expense):

Interest expense

Penalty on prepayment of Preferred B shares

Refund of equipment deposit

Change in fair value of derivatives

Loss on settlement

Gain on settlement of liabilities

Other expense

Total other expense

Total other income (expense), net

Loss before provision for income taxes

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$ ( 32,245,997 )

Preferred Dividends

Net loss to common shareholders

$ ( 32,245,997 )

$ ( 3,601,598 )

Loss per common share - basic and diluted

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Edgemode, Inc.

(Formerly Fourth Wave Energy,

Statements of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Changes in Stockholders’

Equity (Deficit)

For the years ended December 31, 2023 and 2022

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Balance December 31, 2021

Common shares issued in exchange for cash

Preferred shares issued in exchange for cash

Common shares issued in exchange for cryptocurrency

Common shares issued for exercise of options

Common shares issued for exercise of options - cashless

Common shares issued for exercise of options - cryptocurrency

Stock-based compensation

Contribution of Cryptocurrency from related party

Preferred dividends

$ ( 3,634,131 )

( 3,558,755 )

Balance December 31, 2021

( 3,634,131 )

Conversion of preferred shares into common

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Common shares issued in exchange for compensation

Common shares issued in exchange for deferred financing costs

Common shares issued in exchange for deferred financing

Common shares cancelled pursuant to SEC Legal case

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( 1,593,672 )

Common shares issued for settlement of claims

Stock-based compensation

( 2,785,746 )

Balance December 31, 2023

$ ( 38,665,874 )

$ ( 3,132,956 )

The accompanying notes are an integral part of

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Edgemode, Inc.

(Formerly Fourth Wave Energy,

Statements of Cash Flows

Consolidated Statements of Cash Flows

For the Year Ended

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$ ( 32,245,997 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided

by (used in) operating activities:

Interest expense on principal default

Interest expense charge for day one derivative loss

Prepayment on penalty of Preferred B shares

Change in fair value of derivative liabilities

Loss on sale of equipment and impairment

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Loss on cryptocurrency transactions

Loss on settlement

Gain on settlement of liabilities

Loss on prepaid hosting termination

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Prepaid expenses and other current assets

( 1,608,670 )

Prepaid expenses and other current assets – related

Cryptocurrencies - mining

( 1,572,906 )

Accounts payable and accrued expenses

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Lease liabilities

Net cash used in operating activities

( 2,169,308 )

Net cash provided by (used in)

operating activities

( 2,169,308 )

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Purchase of equipment

( 1,339,000 )

Proceeds from sale of equipment

Proceeds from sale of cryptocurrencies

Net cash provided by investing activities

Net cash provided by investing

Financing Activities:

Proceeds from issuance of common shares, net of offering costs

Proceeds from issuance of common shares, net of offering

Proceeds from subscription receivable

Proceeds from issuance of preferred shares, net of offering costs

Proceeds from exercise of common stock options

Proceeds from issuance of preferred shares, net of offering

Payments on equipment notes payable

( 1,149,393 )

Proceeds from notes payable

Proceeds from related party advances

Payments of convertible notes

Payments on notes payable

Net cash provided by financing activities

Net cash provided by (used in)

financing activities

Net change in cash

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Supplemental Disclosures of Noncash Financing Information:

Shares issued for deferred financing costs

Shares issued for cryptocurrency assets

Equipment financed with notes payable

Shares issued for deferred financing

Shares issued for cryptocurrency

Conversion of preferred shares into common shares

Accrued dividends

Cryptocurrency assets contributed by related party

Equipment purchased with cryptocurrency assets

Equipment sold in exchange for cryptocurrency assets

Common shares cancelled pursuant to SEC legal case

Subscription receivable

Loans settled through release of restricted cryptocurrency assets

Option exercise paid with cryptocurrency assets

Common shares cancelled pursuant

to SEC legal case

Convertible notes issued in exchange

for cryptocurrency

Note payable issued in exchange

for cryptocurrency

Repayment of note payable using

cryptocurrency

Cryptocurrency used to pay accrued

Cryptocurrency used to pay accounts

The accompanying notes are an integral part of

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Edgemode, Inc.

(Formerly Fourth Wave Energy,

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Basis of Presentation

Edgemode, Inc.

(Formerly Fourth Wave Energy, Inc.) (“we”,

“our”, the “Company”) was incorporated in Nevada on January 21, 2011.

Since its incorporation, the Company

has attempted to become involved in a number of business ventures, all of which were unsuccessful and which it has abandoned.

(“we”, “our”,

the “Company”) was incorporated in Nevada on January 21, 2011.

Since its incorporation, the Company has attempted to become

involved in a number of prior business ventures, all of which were unsuccessful and which it has abandoned.

After the merger described

below, the Company became a cryptocurrency mining company and is currently in the process of purchasing cryptocurrency mining equipment

to restart its mining operations.

On March 16, 2020 we acquired all of the outstanding

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to Fourth Wave Energy, Inc.

In connection with the acquisition of FWI in March

2020, the Company entered into consulting agreements with certain founders of FWI.

The consulting agreements require the Company to collectively

pay $379,850 in consulting fees during the terms of the consulting agreements.

In March 2021 the Company agreed to sell the FWI technologies

and its business plan to GeoSolar Technologies, Inc.

a Colorado corporation (“GST”) in exchange for 10,000,000 shares of GST

common stock (the “GST Shares”), such GST Shares distributable to the Company’s shareholders.

As a part of this transaction,

the consultants agreed to release the Company from any liability for any consulting fees owed to them by the Company and return a portion

of the Company’s common stock held by such consultants.

During the year ended December 31, 2021, 4,700,000 shares of the Company's

common stock were returned to the Company and cancelled.

The technology granted to GST was carried on our balance sheet at zero value

and the shares received were also recorded at no value.

FWI was voluntarily dissolved on December 8, 2021.

The ex-dividend date, record

date and distribution date for the registered distribution of the GST Shares to the Company's shareholders, subject to FINRA clearance,

is the following:

Ex-Dividend Date:

Distribution Date:

Merger Agreement

Effective January 31, 2022 (the “Effective

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sole shareholder of the Company’s preferred stock converted such shares into 1,000 shares of common stock.

Joseph Isaacs, the Company’s sole

officer and director resigned as an executive officer and director.

Joseph Isaacs, the Company’s sole officer

and director resigned as an executive officer and director.

Pursuant to the terms of the Merger Mr.

Isaacs will provide

services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase

up to 19,987,095

shares of the Company’s common stock, vesting in 90 days, at an exercise price of $ 0.40

The consulting agreement may be terminated by the Company without cause after three months.

Isaacs will provide services to the

Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant to purchase up to 19,987,095

shares of the Company’s common stock, vesting in 90 days, at an exercise price of $ 0.40 per share.

The consulting agreement may

be terminated by the Company without cause after three months.

In addition, Mr.

received a $ 250,000

cash bonus and the Company entered into a contract with a company owned by Joes Isaacs to perform services for total value of

Charlie Faulkner and Simon Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers.

Isaacs received a $ 250,000 cash bonus and the Company

entered into a contract with a company owned by Joe Isaacs to perform services for total value of $240,000.

Charlie Faulkner and Simon

Wajcenberg, the principals of EdgeMode, were appointed as directors and executive officers.

Simultaneously with the Merger, approximately

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At the Effective Time the Company has nominal liabilities, excluding the debt and liabilities of

Prior to the closing of the Transaction, the Company was a shell company.

The merger was accounted for as a reverse merger,

whereby EdgeMode Wyoming was considered the accounting acquirer and became our wholly-owned subsidiary.

In accordance with the accounting

treatment for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been

replaced with the historical financial statements of EdgeMode Wyoming prior to the reverse merger.

The financial statements after completion

of the reverse merger include the assets, liabilities, and results of operations of the combined company from and after the closing date

of the reverse merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial

whereby EdgeMode was considered the accounting acquirer and became our wholly-owned subsidiary.

In accordance with the accounting treatment

for a “reverse merger”, the Company’s historical financial statements prior to the reverse merger has been replaced

with the historical financial statements of EdgeMode prior to the reverse merger.

The financial statements after completion of the reverse

merger include the assets, liabilities, and results of operations of the combined company from and after the closing date of the reverse

merger, with only certain aspects of pre-consummation stockholders’ equity remaining in the consolidated financial statements.

On June 3, 2022 the Company changed its name from

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transactions and balances have been eliminated in consolidation.

Reclassification of Comparative Period Presentation

The Company is reclassifying its financial statements for the year-ended

ended December 31, 2021.

These financial statements represent a reclassification of certain prior year account classifications and footnotes.

Use of Estimates

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in the Company’s checking account.

Equipment is recorded at cost.

Expenditures for

renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized.

for maintenance and repairs are expensed.

When equipment is retired or sold, the cost and related accumulated depreciation are eliminated

from the accounts and the resultant gain or loss is reflected in income.

Depreciation is provided using the straight-line

method, based on useful lives of the assets which range from three to fifteen years .

The Company reviews the carrying value of property

and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from

the estimated future cash flows expected to result from its use and eventual disposition.

In cases where undiscounted expected future

cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds

the fair value of the assets.

The factors considered by management in performing this assessment include current operating results, trends

and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors.

Fair Value Measurements

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Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable.

The Company has no assets or liabilities valued

The following fair value hierarchy table presents

information about the Company’s liabilities measured at fair value on a recurring basis:

Schedule of liabilities measured at fair value on recurring basis

Fair Value Measurements at December 31, 2023

Derivative liabilities

The Company had no assets valued using level 1,

level 2, or level 3 inputs as of December 31, 2023.

The Company had no assets or liabilities valued

using level 1, level 2, or level 3 inputs as of December 31, 2022.

Derivative Financial Instruments

Derivatives are measured at their fair value on

the balance sheet.

In determining the appropriate fair value, the Company uses a binomial calculator model.

Changes in fair value are

recorded in the consolidated statements of operations.

Income taxes are provided for the tax effects

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In exchange for providing computing power, the Company is entitled to a

fractional share of the fixed cryptocurrency award the mining pool operator receives (less digital asset transaction fees to the mining

pool operator which are recorded as a component of cost of revenues), for successfully adding a block to the blockchain.

the agreement provides that neither party can dispute settlement terms after thirty-five days following settlement.

The Company’s

fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing

power contributed by all mining pool participants in solving the current algorithm.

Full-Pay-Per-Share payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided by us to the mining

pool as a percentage of total network hash rate, and other inputs.

We are entitled to consideration even if a block is not successfully

placed by the mining pool operator.

The terms of the agreement provides that neither party can dispute settlement terms after thirty-five

days following settlement.

The Company’s Full-Pay-Per-Share is based on the proportion of computing power the Company contributed

to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.

Providing computing power in digital asset transaction

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The consideration is all variable.

it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining

pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration

it will receive, at which time revenue is recognized.

it is not probable that a significant reversal of cumulative revenue will not occur, the amount of consideration recognized is constrained

to the amount of consideration received, at which time revenue is recognized.

There is no significant financing component in these transactions.

Fair value of the cryptocurrency award received

is determined using the quoted price of the related cryptocurrency at the time of receipt.

There is currently no specific definitive guidance

under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has

exercised significant judgment in determining the appropriate accounting treatment.

In the event authoritative guidance is enacted by

the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial

position and results from operations.

Fair value of the cryptocurrency award received is determined using

the quoted price of the related cryptocurrency at the time of receipt.

Under current GAAP, crypto assets held by the Company are accounted

for as indefinite-lived intangible assets.

Those assets are tested for impairment annually and more frequently if events or circumstances

indicate that it is more likely than not that an asset is impaired.

If the carrying amount of the asset exceeds its fair value, an entity

is required to recognize an impairment loss and reduce the carrying amount of the asset to its fair value.

See further discussion under

Recently Accounting Pronouncements.

Stock-Based Compensation

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by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.

The Company accounts for equity-based transactions

with non-employees under the provisions of ASC Topic No.

505-50, “Equity-Based Payments to Non-Employees” (“Topic No.

505-50 establishes that equity-based payment transactions with non-employees shall be measured at the fair value

of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

The Company expenses advertising costs as they

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Deferred Offering Costs

The Company has capitalized qualified direct costs

related to its efforts to raise capital through a sale of its common stock in a private offering.

Deferred offering costs will be deferred

until the completion of the private offering, at which time they will be reclassified to additional paid-in capital as a reduction of

the offering proceeds.

If the Company terminates the planned offering or there is a significant delay, all of the deferred offering costs

will be immediately written off to operating expenses.

As of December 31, 2022, $ 264,706 of deferred offering costs were capitalized.

The Company had capitalized qualified direct costs

related to its efforts to raise capital through a sale of its common stock in a private offering as of December 31, 2022.

Deferred offering

costs will be deferred until the completion of the private offering, at which time they will be reclassified to additional paid-in capital

as a reduction of the offering proceeds.

Due to the delays in the financing, during the year ended December 31, 2023, $ 264,706 of deferred

offering costs were expensed, which included in general and administrative expenses in the accompanying statement of operations.

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements

that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash

In August 2020, the FASB issued ASU 2020-06, Debt

- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity

(Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity).

reduces the number of accounting models for convertible debt instruments and convertible preferred stock, which results in fewer embedded

conversion features being separately recognized from the host contract as compared with current GAAP.

Additionally, ASU 2020-06 affects

the diluted earnings per share calculation for instruments that may be settled in cash or shares and for convertible instruments and requires

enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity.

ASU 2020-06 allows entities

to use a modified or full retrospective transition method and is effective for smaller reporting companies for fiscal years beginning

after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.

The Company has elected to

early adopt the provision of the ASU as of January 1, 2023 and has applied the guidance to the accounting of the convertible debt and

treatment of derivative liabilities.

In addition, there was no retrospective impact upon adoption.

In November 2023, the FASB issued ASU 2023-07,

Segment Reporting (Topic 280) :

Improvements to Reportable Segment Disclosures, which requires disclosure of incremental

segment information on an annual and interim basis.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim

periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

The Company is currently evaluating the effect

of this pronouncement on its disclosures.

In December 2023, the FASB issued ASU 2023-08,

Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets (“ASU

This ASU is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto

assets at fair value each reporting period with changes in fair value recognized in net income.

The amendments also improve the information

provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale

restrictions, and changes during the reporting period.

ASU 2023-08 requires a cumulative-effect adjustment to the opening balance of retained

earning as of the beginning of the annual reporting period in which the entity adopts the amendment and is effective for all reporting

companies for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years, with early adoption

The Company is evaluating the impact that this ASU may have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09,

Income Taxes (Topic 740) :

Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendment should be applied

on a prospective basis while retrospective application is permitted.

The Company is currently evaluating the effect of this pronouncement

on its disclosures.

Going Concern

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As a result of the Reverse Merger, the Company

has acquired the following assets and liabilities which were recorded at the pre-combination carrying basis.

The assets acquired and

liabilities assumed are as follows:

acquired the following assets and liabilities which were recorded at the pre-combination carrying basis.

The assets acquired and liabilities

assumed are as follows:

Schedule of assets acquired and liabilities

8 unchanged sentences

Pursuant to the terms of the Merger, Mr.

Isaacs will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock

option grant to purchase up to 19,987,095

shares of the Company’s common stock, vesting in 90 days, at an exercise price of $ 0.40

will provide services to the Company in a consultancy capacity at a fee of $11,500 per month and has been issued a stock option grant

to purchase up to 19,987,095 shares of the Company’s common stock, vesting in 90 days, at an exercise price of $ 0.40 per share.

The consulting agreement may be terminated by the Company without cause after three months.

In addition, Mr.

received a $ 250,000

Isaacs received a $ 250,000

cash bonus and the Company entered into a contract with a company owed by Joe Isaacs to perform services for total value of $240,000,

$240,000, which was paid in advance.

which were expensed during the year ended December 31, 2022.

During the year ended December 31, 2023, the Company and Mr.

Isaacs, entered

into a settlement and release agreement whereby Mr.

Isaacs agreed to a reduction in the compensation to a total of $55,000, subject to

the Company making payments on or before May 14, 2023 and June 14, 2023.

During the year ended, December 31, 2023, the Company made total

payments in the aggregate of $ 65,000 in accordance with the terms of the settlement agreement.

No additional amounts are owed to Mr.

as of December 31, 2023.

of services are left to be performed.

During the year ended December 31, 2022, the Company

granted options to the officers and a consultant of the Company to purchase up to 65,920,895 shares of the Company’s stock, vesting

immediately, at an exercise price of $ 0.40 per share.

During the year ended December 31, 2022, the Company

granted options to the officers of the Company to purchase up to 153,239,206 shares of the Company’s stock, which vest upon the

Company listing its shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market, at an exercise price of

$ 0.10 per share.

As of December 31, 2022 the Company owed the executive

officers of the Company $ 487,159 in accrued payroll for services performed.

On January 31, 2022, the Company granted options

to the officers and a consultant of the Company to purchase up to 65,920,895 shares of the Company’s stock, vesting immediately,

at an exercise price of $0.40 per share.

On January 25, 2023, the Company amended stock option grants dated January 31, 2022 to each of

Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively.

The amendment

reduces the exercise price of the options from $0.40 per share to $ 0.06 per share.

On September 12, 2022, the Company granted options

to the officers of the Company to purchase up to 153,239,206 shares of the Company’s stock, which vest upon the Company listing

its shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market, at an exercise price of $ 0.10 per share.

On March 3, 2023, the Company amended stock option grants dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the

Chief Executive Officer and Chief Financial Officer of the Company, respectively.

The amendment provides for the vesting to be only upon

the closing of the purchase of at least $15 million of crypto mining equipment, rather than conditioned on an uplisting of the Company’s

shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market.

On March 3, 2023, the Company granted to each of Charlie Faulkner and

Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively, options to purchase up to 77,000,000

shares of the Company’s common stock at an exercise price of $0.04 per share, exercisable for five years (the “Stock Options”).

The Stock Options shall each be a non-qualified option and shall become vested and exercisable upon the Company closing on the purchase

of at least $15 million of crypto mining equipment.

As of December 31, 2023 and 2022 the Company owed

the executive officers of the Company $ 661,201 and $ 487,159 in accrued payroll for services performed, respectively.

During the year ended December 31, 2023, the executive

officers of the Company advanced 16,000 to the Company for working capital needs.

The advances are non-interest bearing and are due on

Prepaid Hosting Services

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services are eventually consumed, they are charged to expense.

As of December 31, 2022 the company has prepaid a total of $ 1,586,297 .

Subsequent to December 31, 2022, the company was notified of the Chapter 11 bankruptcy filing of the hosting company and in January

2023 the Company received $ 894,355

As of December 31, 2022 the company had prepaid a total of $ 1,586,297 .

In January 2023, the Company was notified of the Chapter 11 bankruptcy filing of the hosting company and in January 2023 the Company

received $ 894,355

in return of the initial deposit and the remainder of the deposit is subject to bankruptcy claims.

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expensed $ 691,942

the remaining amount of the claim, due to the uncertainty of collectability through the bankruptcy claim.

Fixed assets are stated at cost and depreciated

using the straight-line method over their estimated useful lives.

When retired or otherwise disposed, the carrying value and accumulated

depreciation of the fixed asset is removed from its respective accounts and the net difference less any amount realized from disposition,

is reflected in earnings.

Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed

As of December 31, 2022 and 2021 fixed assets

were made up of the following:

Schedule of fixed assets

Cryptomining equipment

Cryptomining equipment - not in service

Accumulated depreciation

Net book value

Total depreciation expense for the year

ended December 31, 2022 and 2021, was $ 630,670

and $ 836,174

respectively.

During the year ended December 31, 2022, the Company

terminated all future purchase orders related to Ethereum mining equipment and related hosting services, as the Company will focus on

Bitcoin mining, and returned equipment not yet placed in service and investing in new Bitcoin mining equipment .

The remaining equipment

not placed in service as of December 31, 2022 has been delayed and it is unknown when or if it will be delivered to the Company.

result of the delays and uncertainties, the Company has recorded an impairment expense of $ 1,138,687 related to undelivered equipment.

during the year ended December 31, 2022, the remaining amount of the claim, due to the uncertainty of collectability through the

bankruptcy claim.

As of December 31, 2023, the Company has $0 of amounts recorded related to the remaining claims due to the

uncertainty of collectability.

Total depreciation expense for the year ended

December 31, 2023 and 2022, was $ 0 and $ 630,670 respectively.

During the year ended December 31, 2022, the

Company terminated all future purchase orders related to Ethereum mining equipment and related hosting services, as the Company will

focus on Bitcoin mining, and returned equipment not yet placed in service and investing in new Bitcoin mining equipment .

remaining equipment not placed in service as of December 31, 2022 has been delayed and it is unknown when or if it will be delivered

to the Company.

As a result of the delays and uncertainties, the Company recorded an impairment expense of $ 1,138,687 related

to undelivered equipment.

During the year ended December 31, 2023, the Company received refunds totaling $ 700,000 as a result of these

delays, which were recorded as other income in the accompanying statement of operations.

During the year ended December 31, 2022 the Company

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A portion of this equipment was sold for $ 60,000

during the year months ended December 31, 2022.

during the year ended December 31, 2022.

Preferred shares

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have priority over any dividends paid with respect to the holders of our common stock.

During the year ended December 31, 2021, the Company

issued 125,001 Preferred shares for total cash considerations of $ 382,480 .

In connection with the fundraising the Company paid $ 47,500

in advisory fees to a related party for net cash proceeds of $ 334,980 .

During the year ended December 31, 2021, the Company

issued 2,206 Series Seed Preferred shares for total fair value of $ 6,750 for services.

For the year ended December 31, 2021, total dividends

applicable to Preferred shares were $ 42,843 .

The Company did not declare or pay any dividends during the year ended December 31, 2021.

Although no dividends have been declared, the cumulative total of preferred shares dividends due to these stockholders upon declaration

was $ 42,843 as of December 31, 2021.

In connection with the Merger Transaction, the

only outstanding preferred stock and accrued dividends were converted into common stock.

On March 26, 2020, the Company designated 1,000

1,000 shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”)

with a $0.001 par value.

Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of the

Company’s shareholders or with respect to actions that may be taken by written consent.

The 1,000 shares of Series A shares

have the voting power of 250% of the outstanding common shares at the time of any vote.

The holders of the Series A shares are

entitled to receive, when, as and if declared by the Board of Directors out of funds legally available, annual dividends payable in

cash on the 31st day of December in each year, commencing on December 31, 2020 at the rate of $0.10 per share per year.

the recapitalization, the 1,000 shares were converted into 1,000 common shares.

shares of its original 5,000,000 authorized shares of Preferred Stock as Series A Preferred Stock (“Series A”) with a $0.001

Each Series A Preferred share entitles the holder to vote on all matters submitted to a vote of the Company’s shareholders

or with respect to actions that may be taken by written consent.

The 1,000 shares of Series A shares have the voting power of 250% of

the outstanding common shares at the time of any vote.

The holders of the Series A shares are entitled to receive, when, as and if declared

by the Board of Directors out of funds legally available, annual dividends payable in cash on the 31st day of December in each year, commencing

on December 31, 2020 at the rate of $0.10 per share per year.

As part of the recapitalization, the 1,000 shares were converted into 1,000

common shares.

On March 30, 2022 the Company reduced its authorized

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net of unamortized discount of $ 7,274 .

On January 25, 2023, the Company redeemed the

Preferred B shares and paid to the holder a total of $ 270,549 which included the stated value of $ 212,500 , $ 6,190 in accrued dividends

and the early redemption premium of $ 51,859 .

Common shares

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warrants to purchase 300,000 shares of common stock with an exercise price of $0.50, which expire five years from the date of grant.

During the year ended December 31, 2021, the company issued 48,563,068 common shares for cash and cryptocurrency proceeds of $ 2,838,476 .

In connection with the fundraising the company paid $ 182,250 in advisory fees, of which $168,500 were paid to a related party, for net

cash and cryptocurrency proceeds of $2,656,226.

During the year ended December 31, 2022, the Company

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in the current period.

In addition, the Company was to pay $50,000 in cash compensation each quarter for ongoing advisory services.

As of December 31, 2022 the Company had accrued the first $50,000 that was owed.

During the year ended December 31, 2023, no additional

services were provided and the Company and the advisor agreed to settle the first $50,000 in exchange for the Company removing the Rule

144 restrictive legend.

As a result, the Company recorded a gain on settlement in the amount of $ 50,000 .

During the year ended December 31, 2022, the Company

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The Commitment shares were

valued $ 0.105 per share for total value of $ 264,706 which has been recorded as deferred offering costs which will be offset against the

future proceeds.

During the year ended December 31, 2021, the Company

issued 9,147,858 common shares upon the exercise of options for cash and cryptocurrency proceeds of $ 159,120 .

In addition, the Company

issued 43,733,770 shares for the exercise of options on a cashless basis.

During the year ended December 31, 2021, a director

of the Company contributed cryptocurrencies to the company with a value of $ 29,547 , which was accounted for as a capital contribution.

valued $ 0.105 per share for total value of $ 264,706 which were recorded as deferred offering costs and expensed due to the delays in the

On March 30, 2023, the Company entered into a

settlement agreement with a previous note holder for settlement of outstanding claims of a note payable that had been paid in full previously.

Per the terms of the settlement agreement, the Company issued 250,000 shares of common stock, and as a result the Company recorded a loss

on settlement of $ 9,975 .

Stock Options

During the year ended December 31, 2023, the Company

granted to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company, respectively,

options to purchase up to 77,000,000 shares of the Company’s common stock at an exercise price of $0.04 per share, exercisable for

five years (the “Stock Options”).

The Stock Options shall each be a non-qualified option and shall become vested and exercisable

upon the Company closing on the purchase of at least $15 million of crypto mining equipment.

The Company used the black-scholes option

pricing model to value the options and determined a fair value of $ 4,814,035 .

As of December 31, 2023, the Company had not met the contingent

vesting requirements, and as such no amounts have been expensed related to these options.

During the year ended December 31, 2022, the Company

issued a stock option grant to purchase up to 85,907,990 shares of the Company’s common stock, vesting immediately and in 90 days,

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since the Company does not have adequate historical exercise data to estimate the expected term.

During the year ended December 31, 2022, the Company

issued a stock option grant to purchase up to 153,239,206 shares of the Company’s common stock, which vest upon the Company listing

its shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market, at an exercise price of $0.10 per share.

The expected term was estimated using the simplified method for employee stock options since the Company does not have adequate

historical exercise data to estimate the expected term.

The Company used the black-scholes option pricing

model to value the options and expensed $ 24,219,306 and $ 2,530,668 during the year ended December 31, 2022 and 2021, respectively.

of December 31, 2022, the Company has $17,715,672 of value remaining to be expensed based upon completions of milestones, of which $16,865,676

is contingently subject to expense recognition based on the timing of when the Company is able to up-list the shares (which is reliant

on various regulatory approvals outside of the Company’s control) as describe above, and $0 of remaining amortization to expensed

pursuant to the vesting terms.

The Company used the black-scholes option

pricing model to value the options and expensed $ 24,219,306 during the year ended December 31, 2022.

During the year ended December 31,

2023, the Company amended stock option grants dated January 31, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive

Officer and Chief Financial Officer of the Company, respectively.

The amendment reduces the exercise price of the options from $0.40 per

share to $0.06 per share.

As a result of the amendment, the Company recorded an additional $ 1,236,487 of stock-based compensation expense

based on the incremental fair value resulting from the change in exercise price.

During the year ended December 31, 2022, the

Company issued a stock option grant to purchase up to 153,239,206

shares of the Company’s common stock, which vest upon the Company listing its shares on the NASDAQ Global Market, New York

Stock Exchange, or another equivalent market, at an exercise price of $0.10 per share.

The expected term was estimated using the simplified

method for employee stock options since the Company does not have adequate historical exercise data to estimate the expected term.

On March 3, 2023, the Company amended stock option grants dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg,

the Chief Executive Officer and Chief Financial Officer of the Company, respectively.

The amendment provides for the vesting to be only

upon the closing of the purchase of at least $15 million of crypto mining equipment, rather than conditioned on an uplisting of the Company’s

shares on the NASDAQ Global Market, New York Stock Exchange, or another equivalent market.

The amendment resulted in no additional incremental

fair value being recorded.

As of December 31, 2023, the Company has $ 22,529,707

of value remaining to be expensed based upon completions of milestones, of which $ 21,679,711 is contingently subject to expense recognition

based on the timing of when the Company is able to close on a purchase of at least $15 million of crypto mining equipment as describe

above, and $ 0 of remaining amortization to expensed pursuant to the vesting terms.

The following table summarizes the stock option

activity for the years ended December 31, 2023 and 2022:

Schedule of option activity

Schedule of stock option activity

Weighted-Average Exercise Price Per Share

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As of December 31, 2023, the Company had 85,907,990

stock options that were exercisable and 137,473 that are in dispute.

The weighted average remaining life of all outstanding stock options

was 4.48 years as of December 31, 2022.

Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying

stock option and the fair value of the Company’s common stock for stock options that were in-the-money at period end.

As of December

31, 2022, the intrinsic value for the options vested and outstanding was $ 0 and $ 8,248 , respectively.

stock options that were exercisable and 137,473

that are in dispute.

The weighted average remaining life of all outstanding stock options was 3.75 years as of December 31, 2023.

Aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option and the fair

value of the Company’s common stock for stock options that were in-the-money at period end.

As of December 31, 2023, the

intrinsic value for the options vested and outstanding was $ 0

respectively.

Stock Warrants

Pursuant to the reverse merger

transaction, the 11,515,714 issued and outstanding warrants of the Company prior to the merger transaction remain outstanding and are

shown as granted as part of the recapitalization as described in Note 4.

Of the total recapitalized, 1,142,857 are presented as reclassified in

the year ended 2022 as they were not previously shown as outstanding in the pre-merger Edgemode, Inc.

Pursuant to the reverse merger transaction, the

11,515,714 issued and outstanding warrants of the Company prior to the merger transaction remain outstanding and are shown as granted

as part of the recapitalization as described in Note 4.

Of the total recapitalized, 1,142,857 are presented as reclassified in the year

ended 2022 as they were not previously shown as outstanding in the pre-merger Edgemode, Inc.

December 31, 2021 10-K.

These warrants

were subsequently forfeited as discussed below and as such have no material impact on the financial statements.

During the year ended December 31, 2022, the

Company had 2,285,714

warrants to purchase shares of common stock forfeited as a result of the settlement of a SEC legal case.

These warrants were

subsequently forfeited as discussed below and as such have no material impact on the financial statements.

During the year ended December 31, 2022, the Company

had 2,285,714 warrants to purchase shares of common stock forfeited as a result of the settlement of a SEC legal case.

The following table summarizes the stock warrant

activity for the year ended December 31, 2023 and 2022:

Schedule of warrant activity

Schedule of stock warrant

Weighted-Average Exercise Price Per Share

Outstanding, December 31, 2021

( 2,285,714 )

Outstanding, December 31, 2022

Recapitalization

( 2,285,714 )

Outstanding, December 31, 2023

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common stock is presented as part of the recapitalization on the equity statement.

In April 2023, the Company utilized an existing

marginal lending facility with SFOX, a digital assets broker.

The marginal lending facility allows the Company to borrow funds up to a

maximum aggregate amount of $ 50,000 to finance its investment activities in digital assets.

The terms of the marginal lending facility

include an interest rate on the borrowed funds of 11 % and the maximum borrowing period under the facility is 28 days, the facility can

be rolled over provided there is sufficient collateral.

The facility is secured by a pledged collateral of digital assets.

is required to maintain a collateral balance equal to 110% of the outstanding principal balance with the lender.

As of December 31, 2023,

the collateral balance was returned and the loan balance has been settled in full.

Equipment Notes Payable

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The financing agreements required a

down payments in the aggregate of $ 600,408

equal monthly payments .

The Company used a 15% discount rate to determine the net present value of the loan value in the aggregate

of $ 2,441,591 .

During the year ended December 31, 2022 and 2021 the company made payments of $ 248,184 and $ 1,366,860 , respectively, of which $ 40,032

and $ 217,467 was recorded as interest expense.

down payments in the aggregate of $ 600,408 and 24 equal monthly payments.

The Company used a 15% discount rate to determine the net present

value of the loan value in the aggregate of $ 2,441,591 .

During the year ended December 31, 2022 the company made payments of $ 248,184 ,

of which $ 40,032 was recorded as interest expense.

On July 11, 2022, the Company terminated its agreements

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balances in equipment notes payable on the Company's balance sheet.

In addition the Company has recorded the remaining $ 95,926 interest

In addition the Company has recorded the remaining $ 95,926 of interest

amounts owed under the agreements as of December 31, 2022 as the Company is in technical default due to lack of payments.

The balance of the loans as of December 31, 2022 is $ 1,179,972 .

The balance of the loans as of December 31, 2023

is $ 1,179,972 .

The following table presents the future maturities

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Principal Amount

Note 10 – Cryptocurrency Assets

Convertible notes payable

1800 Diagonal Lending Notes

On April 11, 2023, the Company entered into a

Securities Purchase Agreement effective April 20, 2023 with 1800 Diagonal Lending LLC, an accredited investor, pursuant to which the Company

sold the investor an unsecured promissory note in the principal amount of $ 60,760 (the “April Promissory Note”).

received net proceeds of $ 50,000 in consideration of issuance of the April Promissory Note after original issue discount of $ 6,510 and

legal fees of $ 4,250 .

The aggregate debt discount of $10,760 is being amortized to interest expense over the respective term of the note.

The April Promissory Note shall incur a one-time interest charge of 13 %, which is added to the principal balance, has a maturity date

of March 11, 2024 , and requires monthly payments of $ 7,629 beginning on September 15, 2023.

The April Promissory Note is convertible into

common shares of the Company upon an event of default, at a rate of 71% of the lowest price for the preceding 20 trading days.

upon default, the Company must repay an amount equal to 150% of the then outstanding amount of principal and accrued interest combined.

As of December 31, 2023, the balance on the note is $ 42,262 , with a remaining unamortized discount of $ 2,280 .

In addition, on April 11, 2023, the Company

entered into an additional Securities Purchase Agreement effective April 20, 2023 with the above investor, pursuant to which the

Company sold the investor an unsecured promissory note in the principal amount of $ 56,962

(the “Convertible Note”), bears interest at a rate of 8 %,

or 22% in the event of default, and matures on April

The Company received net proceeds of $ 50,000

in consideration of issuance of the Convertible Note after original issue discount of $ 2,712

and legal fees of $ 4,250 .

The aggregate debt discount of $6,962 is being amortized to interest expense over the respective term of the note.

The Convertible

Note is convertible into common shares of the Company beginning on the sixth-month anniversary, at a rate of 65% average of the

three of the lowest prices for the preceding 15 trading days.

In addition, upon default, the Company must repay an amount equal to

150% of the then outstanding amount of principal and accrued interest combined.

As of December 31, 2023, the balance on the note is

with a remaining unamortized discount of $ 1,940 .

On August 4, 2023, the Company entered into a

Securities Purchase Agreement with 1800 Diagonal Lending LLC, an accredited investor, pursuant to which the Company sold the investor

an unsecured original issuance discount promissory note in the principal amount of $ 71,450 (the “August Promissory Note”).

The Company received net proceeds of $ 60,000 in consideration of issuance of the August Promissory Note after original issue discount

of $ 7,200 and legal fees of $ 4,250 .

The aggregate debt discount of $11,450 is being amortized to interest expense over the respective

term of the note.

The August Promissory Note shall incur a one-time interest charge of 13 %, which is added to the principal balance, has

a maturity date of May 24, 2024 , and requires monthly payments of $ 8,971 beginning on September 15, 2023.

The August Promissory Note is

convertible into common shares of the Company at any time following an event of default at a rate of 71% of the lowest trading price of

the Company’s common stock during the twenty prior trading days.

In addition, upon default, the Company must repay an amount equal

to 150% of the then outstanding amount of principal and accrued interest combined.

As of December 31, 2023, the balance on the note is

$ 99,529 , with a remaining unamortized discount of $ 5,647 .

On October 20, 2023 the Company received

notice from 1800 Diagonal Lending LLC, the holder of the April Promissory Note, Convertible Note and August Promissory Note

(collectively, the “1800 Notes”) that such notes were in default.

holder has made demand for the immediate payment of the 1800 Notes of a sum representing 150% of the remaining outstanding principal

balances of the 1800 Notes in the aggregate of $250,008.99, together with accrued interest and default interest as provided for in

the 1800 Notes.

As a result of the default, the 1800 Notes became convertible into common stock and an additional $ 88,618

of principal was added to the note balance.

In addition, as a result of the default the notes became convertible at a variable rate resulting in derivative

liability accounting under ASC 815.

The fair value of the derivative on the date of default was charged directly to interest expense,

as the notes are passed due.

See further discussion under Note 10.

Other Convertible Promissory Notes

On April 25, 2023, the Company entered into a

Securities Purchase Agreement with an accredited investor, pursuant to which the Company sold the investor an unsecured promissory note

in the principal amount of $ 60,000 .

The Company received proceeds of $ 60,000 in consideration of issuance of the Promissory Note.

Promissory Note shall bear interest at a rate of 10 % and have a maturity date of May 26, 2023 .

The Promissory Note has a prepayment percentage

of 130% for the period beginning on the issuance date and ending on the maturity date.

As of December 31, 2023, the balance on the note

is $ 60,000 .

The note is past due.

In addition, on April 26, 2023, the Company entered

into a Promissory Note Purchase Agreement with another investor, pursuant to which the Company sold the investor an unsecured convertible

promissory note in the principal amount of $ 57,502 Promissory Note.

The Company received gross proceeds of $ 57,502 in consideration of

issuance of the Promissory Note.

The Promissory Note shall bear interest at a rate of 10 % and have a maturity date of May 26, 2023 .

Promissory Note has a prepayment percentage of 130% for the period beginning on the issuance date and ending on the maturity date.

of December 31, 2023, the balance on the note is $ 57,502 .

The note is past due.

The investors may in their option, at any time

following the 180-day anniversary from the issuance date, as defined in the Promissory Notes, convert all or any part of the outstanding

and unpaid amount of the Promissory Notes into fully paid and non-assessable shares of Common Stock.

If the Promissory Notes are not repaid

on or prior to the maturity date, the conversion price will be $0.20 or 50% of the preceding five day VWAP on the six month anniversary,

which is lower, subject to a floor conversion price of $0.01 per share.

On the 180-day anniversary date the resulting conversion price

is equal to $0.01 Furthermore, the Promissory Notes contain a “most favored nation” provision that allows each investor

to claim any preferable terms from any future securities, excluding certain exempt issuances.

Derivative Liabilities

The fair values of the conversion option of outstanding

convertible notes payable and common stock warrants were determined to be derivative liabilities under ASC 815 due to the default on

convertible notes payable disclosed above, which resulted in a variable conversion price on the outstanding convertible note payable.

The fair value of the derivative liabilities was estimated using a binomial model with the following assumptions:

Schedule of fair value of derivative liabilities

As of December 31, 2023

Conversion Option

Dividend Yield

Risk-free rate

Expected term

2.5-3.25 years

Exercise price

Derivative liability fair value

Number of shares issued upon conversion, exercise, or satisfaction of required conditions as

of December 31, 2023

All fair value measurements related to the derivative

liabilities are considered significant unobservable inputs (Level 3) under the fair value hierarchy of ASC 820.

The table below presents the change in the fair

value of the derivative liability during the year ended December 31, 2023:

Schedule of change in the fair value of derivative liabilities

Fair value as of December 31, 2022

Fair value on the date of issuance related to principal default

Fair value on the date of issuance related to warrants issued

Change in fair value of derivatives

Fair value as of December 31, 2023

The total impact of derivative liabilities recognized

in the Company’s consolidated statements of operations includes the change in fair value of derivatives, with the Company recognizing

a total gain of $ 8,081 during the year

ended December 31, 2023.

The fair value of the derivatives related to the principal default on the notes was charged directly to interest

In addition, as a result of the default, all other potentially dilutive instruments must also be recorded at fair value pursuant

The initial fair value of the outstanding warrants was charged to the change in fair value of derivatives.

Cryptocurrency Assets

The Company began cryptocurrency mining activities

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Schedule of cryptocurrency activities

Revenue recognized from cryptocurrency mined

Additions of cryptocurrency - sale of common stock

Additions of cryptocurrency – exercise of common stock options

Additions of cryptocurrency – contribution from director

Additions of cryptocurrency - sale of fixed assets

Proceeds from sale of cryptocurrencies

( 1,043,242 )

Fixed assets acquired with cryptocurrency

Settlement of loans with cryptocurrency

Realized loss on sale/exchange of cryptocurrencies

Cryptocurrency at December 31, 2021

1 unchanged sentence

Additions of cryptocurrency - sale of common stock

Proceeds from sale of cryptocurrencies

Sale of cryptocurrencies for cash proceeds

Cryptocurrency used for officer compensation

1 unchanged sentence

Cryptocurrency at December 31, 2022

Additions of cryptocurrency – convertible notes

Additions of cryptocurrency – other notes

Cryptocurrency used for payment of accounts payable

Cryptocurrency used for payment of salaries

Cryptocurrency used for payment of other notes

Sale of cryptocurrencies for cash proceeds

Realized loss on sale/exchange of cryptocurrencies

Cryptocurrency at December 31, 2023

The cumulative tax effect at the expected rate

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Valuation allowance

( 1,252,700 )

Net deferred income tax assets

14 unchanged sentences

in these financial statements due to the net loss.

At December 31, 2022, the Company has net operating loss carry forwards

totaling approximately $ 4,800,000 , which will be carried forward to future periods.

At December 31, 2023, the Company has net operating loss carry forwards totaling approximately

$ 6,000,000 , which will be carried forward to future periods.

Commitments and Contingencies

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which the Company believes to be cancelled.

The total number of stock options being contested is 137,473 , which are still shown as issued and outstanding in Note 8 above.

Subsequent Events

On January 25, 2023, the Company amended stock

option grants dated January 31, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial

Officer of the Company, respectively.

The amendment reduces the exercise price of the options from $0.40 per share to $0.06 per share.

On January 25, 2023, the Company redeemed the Preferred

B shares and paid to the holder a total of $270,549 which included the stated value of $212,500, $6,190 in accrued dividends and the early

redemption premium of $51,859.

On February 27, 2023, the Company entered into

a loan facility agreement with an unrelated third-party for up to an initial amount of BTC 3,000 which is to be repaid in 5 years from

the date of the first advance.

Additional advances may be provided under the agreement with approval from the lender.

Advances shall accrue

interest daily at a rate of 8.5%.

No amounts have been advanced as of the date of this filing.

On March 3, 2023, the board of directors of the

Company granted to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer of the Company,

respectively, options to purchase up to 77,000,000 shares of the Company’s common stock at an exercise price of $0.04

per share, exercisable for five years (the “Stock Options”).

The Stock Options shall each be a non-qualified option and shall

become vested and exercisable upon the Company closing on the purchase of at least $15 million of crypto mining equipment.

On March 3, 2023, the Company amended stock option

grants dated September 12, 2022 to each of Charlie Faulkner and Simon Wajcenberg, the Chief Executive Officer and Chief Financial Officer

of the Company, respectively.

The amendment provides for the vesting to be only upon the closing of the purchase of at least $15 million

of crypto mining equipment, rather than conditioned on an uplisting.

its shares on the NASDAQ Global Market, New York Stock Exchange,

or another equivalent market.

On March 30, 2023, the Company entered into

a settlement agreement with a previous note holder for settlement of outstanding claims.

Per the terms of the settlement agreement, the

Company issued 250,000 shares of common stock.

On April 11, 2023, the Company entered into a promissory

note with an unrelated third-party for $60,760 and an original issue discount of $6,510 and $4,250 in fees for net proceeds of $50,000.

The note is to be repaid by March 11, 2024, and incurs a one-time, 13% interest charge of $7,898 and requires monthly payments of $7,629.

In the event of default, the note is convertible into shares of common stock of the Company at a rate of 71% of the lowest trading price

for common stock during the 20 trading days prior to the conversion date.

The Company expects to receive the funds from this note immediately

following the filing of the Form 10-K.

On April 11, 2023, the Company entered into a promissory

note with an unrelated third-party for $56,962 and an original issue discount of $2,712 and $4,250 in fees for net proceeds of $50,00.

The note is to be repaid by March 11, 2024, and bears interest at a rate of 8%.

The note is convertible into shares of common stock of

the Company beginning 180 days after the date of the note at a rate of 65% of the lowest trading price for common stock during the 15

trading days prior to the conversion date.

The Company expects to receive the funds from this note immediately following the filing of

the Form 10-K.

The total number of stock options being contested is 137,473 , which are still shown as issued

and outstanding in Note 8 above.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data